AASB 7 (IFRS 7) Financial Instruments Disclosures

I just finished an update on IFRS 7 and was reminded about how much
of a load this standard is going to put on most firms – and how little
value this will add to published accounts.

In Australia, all firms, big and small, need to use full IFRS if they
are reporting entities (this is most firms), which means that full
compliance with all standards is mandatory.

For corporates IFRS 7 is of dubious value at best. As an investor,
unless the firm I am investing in is taking large, naked speculative
positions in foreign currency, am I really interested in their forex
sensitivity or perhaps the holdings of HTM, AFS assets and loans and
receivables?

Even for banks I doubt this will be useful – but it will require the
disclosure of much information that is market sensitive, meaning that
those reporting early in the first year of implementation will have
their holdings a bit more exposed than those reporting later.

In summary – you have to do it, you have no choice; so learn to live
with it. Engage with your auditor early, but get independent advice on
what does, and does not, have to be disclosed. Make sure the person you
are getting the advice from knows what they are talking about (there are
not many who do) and even your normal audit partner / manager may not
know. Check they have at least some experience.

If they do not, and for those of you reporting early, read widely. This is an example of disclosure for t